Given expectations about lengthy MMP coalition talks and the later November 7 election day this year, there was a risk that New Zealand wouldn’t see much political leadership until February, Parker said.
“It’s this big lull, isn’t it?”
This week was the last in which Parliament was sitting.
“Then there’s this whole kind of electioneering period till November, and then negotiations, that could run right up till Christmas.”
Then New Zealand famously shuts down for the summer break.
Business confidence
There was no way around the fact that business typically favours a centre-right Government and is often spooked by the prospect of Labour/Green wins, Dann said.
So that needed to be factored into things like business confidence.
But there was evidence that confidence more generally fell during the election period, he said.
Looking at ANZ Business Outlook surveys, the clearest example was from the 2014 election period, when the John Key National coalition was returned to power.
Business confidence hit a 20-year high of 70.8% in February 2014, then steadily deteriorated through the year as the election approached.
The September 2014 survey (taken before the September 20 election) fell to a net 13.4% – a two-year low.
At the time, Cameron Bagrie (then ANZ chief economist) attributed the slide explicitly to politics, partly on the back of the opposition’s proposed capital gains tax and other flagged regulatory changes.
In October, after the Key Government was returned for a third term, confidence rebounded to a net 26.5%.
In November it rose again to 31.5%, “extending post-election gains from a two-year low”.
In 2017, confidence fell to a two-year low at a net 0% before the election.
The September 23 election left neither major bloc with a majority, handing Winston Peters and NZ First the balance of power. It took until October 19 – nearly four weeks – for a decision (a Labour-led coalition).
In October, during the uncertainty, business confidence fell further to -10%.
GDP itself was generally too big and broad to show much material impact from election uncertainty, Dann said.
But there was one other part of the economy that tended to feel the chill: property.
Property market worries
The data and insights team at Bayleys Real Estate recently looked at whether the New Zealand housing market really slows down in an election year.
They compared sales activity in the election quarter and the prior quarter against the same quarters in the year before and after.
They found that some years saw no impact, such as 2020 and 2023, while others, such as 2014 and 2017, had a noticeable slowdown.
An important variable was the extent to which housing affordability was a prominent campaign issue, they said.
The data for 2026 so far pointed to a minor impact. “Sales activity in the first half of the year was broadly comparable with 2025, even despite the market seeing hesitation earlier in the year due to the Middle East conflict and oil shock,” Bayleys said.
“Sales activity for July and August was a bit softer, although at the same time we have seen some very highly contested auctions.”
This year, tax policy was the issue that had some overlap with the housing market.
Labour is proposing a capital gains tax, although that would affect only investors, not owner-occupiers.
“Labour did announce, on Monday, that they’re not going to remove the ability to do interest deductibility for landlords,” Parker said.
That might help give things a bit of a boost, Dann said.
This week Dann and Parker also take a look at new research showing Kiwis are increasingly using credit cards to do their shopping.
Listen to the full episode for the complete conversation.
The Economy of Everything is available on the iHeart app or wherever you get your podcasts.
The series is hosted by Liam Dann, business editor-at-large, and Tamsyn Parker, business editor for the NZ Herald. Thanks to CMC Markets.